Description
Future Value (FV) is a financial metric that determines the projected value of an investment or cash flow at a specified future date, considering a predetermined interest rate or rate of return. The formula for FV involves multiplying the present value (initial investment or cash flow) by the factor of (1 + r) raised to the power of the number of periods the investment is held or the cash flow compounds. This calculation enables individuals and businesses to assess the potential growth of their investments over time, aiding in financial planning, investment decision-making, and setting savings goals by providing insight into the value that investments may accumulate in the future based on the expected rate of return.